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By Bloomberg

Oil extended its advance to trade above $61 a barrel on signs the U.S. supply glut is easing.

Futures rose as much as 1.8 percent in New York after gaining 2.5 percent Tuesday. Crude inventories fell by 2 million barrels through May 8 for a second weekly drop, the industry- funded American Petroleum Institute was said to have reported. A decline of 250,000 barrels is projected in a Bloomberg survey before government data Wednesday. Global demand this year will increase more than previously forecast, according to OPEC.

Oil is recovering from a six-year low in March as U.S. companies reduced the number of active rigs to the fewest since September 2010, bolstering speculation that output will slow. The rally may still falter as higher prices spur explorers to boost drilling, according to Goldman Sachs Group Inc.

“Markets are factoring in a declining production scenario in the U.S.,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “The concern is that prices will climb high enough to re-stimulate output and boost the rig count. It could be setting us up for a rout.”

West Texas Intermediate for June delivery rose as much as $1.08 to $61.83 a barrel in electronic trading on the New York Mercantile Exchange, and was at $61.24 at 1:38 p.m. Sydney time. The contract gained $1.50 to $60.75 on Tuesday. The volume of all futures traded was about 25 percent below the 100-day average. Prices have advanced 15 percent this year.

U.S. Supplies

Brent for June settlement, which expires Thursday, increased as much as 54 cents, or 0.8 percent, to $67.40 a barrel on the London-based ICE Futures Europe exchange. The more active July contract climbed 31 cents to $67.69. The European benchmark crude traded at a premium of $6 to WTI.

Crude inventories in the U.S., the world’s biggest oil consumer, decreased to 487 million barrels through May 1, according to the Energy Information Administration. Supplies remain near the highest level since 1930, based on monthly records from the Energy Department’s statistical arm dating back to 1920.

Stockpiles at Cushing, Oklahoma, the delivery point for WTI contracts and the nation’s largest oil-storage hub, slid by 827,000 barrels last week, the API in Washington reported, according to ForexLive.

The U.S. will pump 9.19 million barrels a day in 2015, down 40,000 a day from April’s estimate, the EIA said in its monthly Short-Term Energy Outlook on Tuesday. WTI will average $54.32 a barrel this year compared with last month’s prediction of $52.48, the agency said.

OPEC Quota

The cut in U.S. drilling rigs isn’t big enough to lead to persistently lower production, according to Goldman. Oil is now expensive relative to current and forecast fundamentals, analysts including Jeffrey Currie said in a report May 11.

The Organization of Petroleum Exporting Countries is more united now about keeping its output target than at the previous meeting in November, as prices have rebounded this year, Kuwaiti Oil Minister Ali Al-Omair said at a conference in Doha on Tuesday.

Saudi Arabia, which raised its production in April to the highest level in at least three decades, led the group’s decision to maintain collective output quotas at 30 million barrels a day. OPEC’s 12 members, which supply about 40 percent of the world’s crude, are scheduled to discuss policy June 5 in Vienna.

Global consumption will expand by 10,000 barrels a day to 92.5 million this year, it said in its monthly report Tuesday.